IndiGo Co-founder Rakesh Gangwal, Family Trust To Divest 3.4% In Indigo

IndiGo Co-founder Rakesh Gangwal is likely to offload 3.4 per cent stake worth closely Rs 6,831 crore in the low-cost airlines via block deals. The aviation promoter has been divesting over the years after a fall-out with co-founder Rahul Bhatia with whom he started the airlines in 2006.

Apart from Gangwal, the Chinkerpoo Family Trust, whose trustees are Shobha Gangwal and JP Morgan Trust Company of Delaware, will be divesting 3.4 per cent stake in IndiGo, the country's largest airline.

Reportedly, the investment banking firms Goldman Sachs (India) Securities Pvt Ltd, Morgan Stanley India Company and J P Morgan India are the placement agents for the stake sale.

Currently, Gangwal and the family trust together hold about 13.5 per cent in IndiGo.

Under the proposed transaction, to be executed on May 27, up to 1.32 crore equity shares will be sold at a floor price of ₹5,175 per share, as per the term sheet accessed by Reuters.

The floor price is set at a 4.5 per cent discount in comparison to the closing price of Rs 5,420 per share on Monday.

The sources said 1.32 crore shares will amount to around 3.4 per cent stake in the company and the offer size, based on the floor price, is pegged at around USD 803 million or about Rs 6,831 crore.

The proposed share sale, to be done in multiple tranches on BSE and NSE, will be entirely secondary in nature and will not have any fresh issuance of equity.

As part of the deal structure, a 150-day lock-up period will apply to the vendors and their immediate relatives, barring one exception -- they may transfer shares worth at least USD 300 million to a single investor or investor group through a negotiated transaction, subject to certain pricing and lock-up conditions.

In August 2024, Rakesh Gangwal's family trust sold off a 5.24 per cent stake in the airline for Rs 9,549 crore. Before that, Gangwal had sold shares of IndiGo in March.

The stake sale is part of Gangwal's earlier decision to reduce his shareholding after a bitter feud with co-founder Rahul Bhatia over alleged corporate governance issues.

Since February 2022, Gangwal and his wife Shobha Gangwal have been offloading their shares in IndiGo.

In September 2022, Rakesh Gangwal and Shobha Gangwal sold a 2.74 per cent shareholding for Rs 2,005 crore. In February 2023, Shobha Gangwal divested a 4 per cent stake in the company for Rs 2,944 crore. Later in August, Shobha Gangwal sold a nearly 2.9 per cent stake in the company for a little over Rs 2,800 crore.